Small communities feel budget pinch

CASTLE DALE - Even as marginally improving numbers celebrate the nation's emergence from economic eclipse, many local Utah officials say they're still struggling to escape its shadows.

An ongoing survey by the Utah League of Cities and Towns found that 65 percent of responding mayors and managers statewide said they were "less able" to meet the financial needs of running their cities in 2010.

Equally concerning the survey found is that 57 percent believe they'll be even "less able" to address those same needs in 2011.

Castle Dale Mayor Neal Peacock said his city's economy is energy dependent and the ongoing slowdown in energy services has left its mark on the city operations. He said property taxes receipts are down because people aren't able to pay them and sales tax revenues have fallen because people are shopping less.

Many feel the pinch. An Emery County Progress Web Poll last November found that nearly 42 percent participants felt the area economy to be "worse" or "much worse" compared to 2009. Only 21 percent felt it "much" or "a little" improved. Thirty-five percent thought it "about the same."

Peacock said the city trimmed its budget by 10 percent in 2010 and anticipates similar for 2011. Cutbacks have mostly been realized through attrition. "When people move on they haven't been replaced," he said.

Castle Dale is down to two full-time maintenance people and a body and a half in the city offices. Whereas four or five seasonal temporary workers used to be employed between April-October, that number has fallen to two.

"There's definitely been a drop in city services," the mayor said, citing an example of how volunteers now must water the city's summer flowers along Main Street instead of city employees.

The Utah League's survey results are especially telling when comparing responses given to the same questions asked four years earlier prior to the onset of the Great Recession. At that time, only 28 percent of mayors and managers felt less able to meet the 2006 needs of their cities and constituents, while 37 percent feared they would be less able to meet obligations.

Reasons for these concerns are simple. Revenues coming into city coffers are falling or holding steady at best, while the expenses of running a city, despite the federal governmental assurances that inflation is being kept in check, continue to spiral upward.

Seventy-four percent of mayors and managers said rising employee healthcare benefits were having either a moderate or major impact on budgets. But there was plenty of other blame to go around, including continuing infrastructure needs (70 percent combined moderate or major impact); rising prices, inflation and cost of living increases (67 percent combined); employee pension costs (66 percent combined); increasing public safety needs (61 percent combined).

Employee wages and salaries only generated a 52 percent response, indicating that's where much of the current belt-tightening is taking place. In a related response, 51 percent said development projects have had to be delayed or cancelled altogether because of the downturn.

Meanwhile, only 21 percent of those responding said their city's tax base was increasing. Twenty-eight percent said it was actually decreasing, and another 21 percent said it was flat. Compare this to the 2006 survey in which 60 percent felt the value of their city's tax base had increased and another 39 percent felt it hadn't changed. Only 1 percent at that time felt the city's tax base had decreased in value.

Citing the impacts on the citizenry and Main Street, 85 percent of those answering the survey said that their cities had seen an increase in unemployment among its residents, while 51 percent noted an increase in business closures.

Respondents also expressed concern that the bursting of the housing bubble in Utah has hurt their cities. The biggest concerns noted were declining property values, increasing utility bill delinquencies and delinquencies for utilities service fees or taxes, and property maintenance issues. Seventy-one percent of the mayors and managers surveyed said they had also dealt with a decrease in building permit revenues.

Survey was conducted Oct. 1 through Nov. 23, of last year (2010).

Also, I finally received a call back from the Utah League's Cameron Diehl. If it's not too late feel free to add it wherever it fits...

"The numbers say to me that Utah's municipalities are still feeling the effects of the recession. Although national numbers may suggest recovery is underway, Utah's cities are clearly lagging behind in what will be a long recovery process," said Cameron Diehl, policy analyst/attorney for the Utah League of Cities and Towns.

"In the meantime Utah's cities are trying to maintain a level of service that their residents expect, while avoiding increasing the tax burden. The cities have done an admirable job to date, but if this the economy continues to lag, some difficult decisions - whether reductionons in services or increasing taxes - may eventually become necessary," Diehl said.